Unstable export markets, worsening terms of trade, and limited access to the markets in advanced countries are just a few of the problems that have plagued nations in Africa, Asia, Latin America, and Middle East. For example, developing countries have worsening terms of trade because of:.A) rising prices of exports relative to importsB) the high price elasticity of supplyC) falling prices of exports relative to imports

The correct answer is letter "C": falling prices of exports relative to imports.

Explanation:

Trade balance refers to the number of exports compared to the number of imports in a country during a given period. It is calculated by subtracting imports from exports. The result is also known as net exports. If the result is positive, there were more exports than imports in the period. If the result is negative, there were more imports than exports in the period.

The situation more developing companies have been facing is more inclined to have a deficit in net exports because of the increase in the price of imports compared to exports. Globalization has allowed people with an increasing income to access more imports at higher prices affecting the trade balance of their countries.

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